Question Details

Beeman Company exchanged machinery with an appraised value 



Pr. 1—Nonmonetary exchange.
Hodge Co. exchanged Building 24 which has an appraised value of $3,200,000, a cost of $5,060,000, and accumulated depreciation of $2,400,000 for Building M belonging to Fine Co. Building M has an appraised value of $3,008,000, a cost of $6,020,000, and accumulated depreciation of $3,168,000. The correct amount of cash was also paid. Assume depreciation has already been updated.

Instructions
Prepare the entries on both companies' books assuming the exchange had no commercial substance. Show a check of the amount recorded for Building M on Hodge's books. (Round to the nearest dollar.)




Pr. 2—Nonmonetary exchange.
Beeman Company exchanged machinery with an appraised value of $1,755,000, a recorded cost of $2,700,000 and Accumulated Depreciation of $1,350,000 with Lacey Corporation for machinery Lacey owns. The machinery has an appraised value of $1,695,000, a recorded cost of $3,240,000, and Accumulated Depreciation of $1,782,000. Lacey also gave Beeman $60,000 in the exchange. Assume depreciation has already been updated.

Instructions
(a)	Prepare the entries on both companies' books assuming that the exchange had commercial substance.  (Round all computations to the nearest dollar.)
(b)	Prepare the entries on both companies' books assuming that the exchange lacked commercial substance.  (Round all computations to the nearest dollar.)




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